Amphastar Pharmaceuticals- Growth has been impressive, Can it continue?
Amphastar Pharmaceuticals, a U.S.-based specialty pharmaceutical company, has shown impressive growth through strategic acquisitions and product development. Founded in 1996, the company focuses on complex generics and biosimilars, with significant milestones including a NASDAQ IPO and FDA approvals. By 2024, Amphastar achieved $732 million in revenue, holding a 3.7% market share. Its pipeline includes key drug candidates targeting osteoporosis, diabetes, and obesity. The company's growth metrics are favorable compared to major generic drug manufacturers, and regulatory reforms may further enhance its market position.
Amphastar Pharmaceuticals, Inc. is a U.S.-based specialty pharmaceutical company known for developing, manufacturing, and marketing injectable, inhalation, and intranasal products used primarily in hospital and emergency care settings. It focuses on developing technically complex specialty drug products, generic formulations and biosimilars.
Founding and Early Development
The company was founded in 1996 in Rancho Cucamonga, California, by Jack Yongfeng Zhang, Ph.D., and Mary Hwamei Luo, Ph.D. Both founders continue to serve as core executives Zhang as CEO and Chief Scientific Officer, Luo as COO and Chairwoman of the Board. Initially, Amphastar focused on generic injectable products, growing organically before pursuing acquisitions.
Key Corporate Milestones
Amphastar's notable growth milestones include:
| Year | Event | Significance |
| 2003 | Acquisition of International Medication Systems, Limited (IMS) | Expanded its manufacturing capacity and injectable product lines |
| 2004 | Incorporation as Amphastar Pharmaceuticals, Inc. | Formally unified its operations under a single entity |
| 2014 | NASDAQ IPO under ticker AMPH | Raised capital for R&D, debt repayment, and global expansion |
| 2015 | FDA approval for Amphadase (hyaluronidase) relaunch; Nanjing facility qualified by FDA | Enhanced bioprocessing capabilities and U.S.-China regulatory compliance |
| 2020 | FDA approval for Glucagon Emergency Injection Kit | Expanded into hypoglycemia emergency treatments |
| 2023 | Acquisition of Baqsimi from Eli Lilly (deal >$1 billion) | Marked entry into a major branded diabetes care market |
| 2024 | Revenue exceeded $644 million; focus on complex generics and biosimilars | Solidified as a leader in specialty pharmaceuticals |
Product Portfolio and Operations
Amphastar's portfolio includes, Basquimi (a Glucagon nasal inhaler for hypoglycemia) which was acquired from Eli Lilly, enoxaparin (an anticoagulant), Primatene Mist (an OTC asthma inhaler), naloxone (opioid overdose treatment), and glucagon injection kits.
The company operates five manufacturing sites across the United States, China, and Europe, maintaining cGMP-compliant facilities, with all finished products made in the U.S.
| Location | Country | Notable Operations |
|---|---|---|
| Rancho Cucamonga, CA | USA | HQ, sterile injectables manufacturing |
| South El Monte, CA | USA | Injectable pharmaceuticals |
| Canton, MA | USA | Manufacturing site |
| Eragny-sur-Epte | France | API (insulin) production |
| Nanjing | China | Expanding manufacturing capacity |
Financial and Strategic Growth
By 2024, Amphastar achieved approximately $732 million in annual revenue and held around a 3.7% share of the global specialty pharmaceutical market. Its strategy emphasizes high-barrier to entry generic and biosimilar products, alongside selective branded acquisitions (e.g., Baqsimi). Revenue and Income have grown rapidly.
Corporate Strategy
Amphastar's mission is to lead in research, development, and manufacturing of generic and specialty pharmaceutical drugs using innovative delivery systems. The company prioritizes regulatory quality, innovation in complex injectables, and integration of global operations for cost-effective manufacturing. The company is executing a dual growth model which both primary organic growth and via strategic acquisitions of drug and drug candidates.
Amphastar has evolved from a small California-based generic drug manufacturer into a publicly traded global biopharmaceutical company driven by scientific capability, strategic acquisitions, and expansion in emergency and endocrinology drug markets.
Pipeline
AMP-015, AMP-007, and AMP-018 are key drug product candidates in Amphastar Pharmaceuticals' pipeline. AMP-015 is a teriparatide product for osteoporosis treatment, positioned as a generic competitor with expected FDA approval soon. AMP-007 is an inhalation generic drug undergoing regulatory review, involving patent challenges typical of high-value generics. AMP-018 is a GLP-1 generic aimed at the fast-growing diabetes and obesity market, currently addressing regulatory feedback. Together, these pipeline products highlight Amphastar's strategic expansion into complex generics and biosimilars, targeting important therapeutic areas and upcoming regulatory milestones.
Comparative Valuation - Generic drug manufacturers
Amphastar's key growth, value and profitability metrics and ratio's look favorable as compared to the major generic drug manufacturers in the US. Growth in revenue and income over the last 5 years has been impressive.
| Company | Ticker | Current Price | Market Cap ($M) | PE Ratio without NRI | PS Ratio | Price-to-Opera ting-Cash-Flow | EV-to- EBITDA | Operating Margin % | 5-Year Revenue Growth Rate (Per Share) | 5-Year EBITDA Growth Rate (Per Share) | 5-Year EPS without NRI Growth Rate |
| Amphastar Pharmaceuticals Inc | AMPH | 24.66 | 1,146.80 | 7.57 | 1.71 | 7.76 | 6.36 | 25.14 | 17.30 | 41.40 | 63.30 |
| Lupin Ltd | NSE:LUPIN | 1,942.30 | 10,122.61 | 23.04 | 3.90 | 29.65 | 15.64 | 28.50 | 8 | 22.20 | 0 |
| Sun Pharmaceuticals Industries Ltd | NSE:SUNPHARMA | 1,690.50 | 46,221.99 | 36.34 | 7.60 | 28.79 | 23.34 | 24.30 | 10.80 | 24.60 | 21.70 |
| Perrigo Co PLC | PRGO | 21.86 | 3,007.56 | 7.51 | 0.70 | 8.23 | 10.15 | 9.55 | 3.10 | -7.60 | -9.70 |
| Viatris Inc | VTRS | 10.41 | 12,136.73 | 4.32 | 0.89 | 6.03 | -52.88 | 2.80 | -11.70 | -10.80 | 0 |
| Sandoz Group AG | XSWX:SDZ | 48.78 | 26,370.78 | 18.72 | 2.36 | 26.37 | 28.13 | 5.18 | 0 | 0 | 0 |
| Teva Pharmaceutical Industries Ltd | XTAE:TEVA | 63.25 | 21,989.49 | 7.45 | 1.33 | 15.71 | 19.81 | 21.12 | -1.60 | 0 | 0.40 |
From <https://www.gurufocus.com/stock/AMPH/analysis>
DCF Valuation.
Given Amphastar's rapid growth the stock appears to be undervalued. Assuming the company's earnings per share grows at 20% annualized for the next 5 years and then settles down to a 4% growth. (Amphastar's actual annualized earnings growth over the last 5 years was 63.3%.)
Regulatory Reform could be a long term Catalyst
The Trump administration has implemented significant regulatory reforms to make it easier and faster for biosimilar biologics to gain approval in the U.S., aiming to lower drug costs and expand patient access. The FDA has issued new draft guidance that reduces reliance on costly and lengthy clinical trials, particularly comparative efficacy studies, by prioritizing advanced analytical testing to demonstrate biosimilarity. This approach cuts development costsestimated savings of $100 million to $300 million per programand shortens approval timelines by up to half. Additionally, the administration is promoting the designation of biosimilars as interchangeable with branded biologics, facilitating easier substitution at pharmacies similar to small molecule generic drugs. These changes address longstanding bureaucratic hurdles, replacing them with a science-driven framework intended to boost competition and affordability. While legal and patent challenges from brand-name drug companies remain, removing these approval barriers is expected to enhance market entry of biosimilars, increase competition, and help lower biologic drug prices, in line with President Trump's goal to reduce prescription drug costs for Americans.
Conclusion
Amphastar is a biopharmaceutical company focused on injectable, inhalation, and intranasal drugs, including its 2023 acquisition of BAQSIMI, a nasal glucagon spray for hypoglycemia treatment. The company delivered strong 2023 and 2024 revenue growth and solid profitability, showing its ability to deliver consistent performance across multiple product lines.
Amphastar's investment thesis include the following points:
- Demonstrated rapid growth from a small California based company to a multi-national pharmaceutical company within 10 years.
- The company is still founder led.
- Valuation models suggest that the stock is undervalued, with a discounted cash flow estimate implying upside potential from its current price.
- The company's presence in and connection with China. This allows them to tap into drug licensing opportunities in China and well as access to the Chinese market.
- Pending FDA reform making it easier for biosimilars to be introduced and succeed in the US market.
However, concerns are on the company's high leverage following its BAQSIMI acquisition, insider selling, and short-term earnings pressure. Despite these risks, the overall sentiment described Amphastar as a well-run, niche pharmaceutical firm with compelling long-term potential if debt is managed prudently. It also has a solid near term and longer term drug product pipeline, indicating that growth will continue. With an undemanding PE of only ~8, Amphastar looks undervalued. Analysts are also bullish on the stock with a 12-month stock target of $33 (a 35% upside from here.)
